Tuesday, Feb. 13, 2007 | 7:18 a.m.
Nevada homeowners unable to pay off their general debts can usually keep their homes if they have filed a form with the county recorder's office.
The form is called a Declaration of Homestead, and it can be filed by any homeowner for a nominal fee. It doesn't protect against all debts - mortgage and child-support payments, and taxes, are among its exceptions.
But it does protect homeowners' equity up to $350,000 for such debt as credit card balances, medical bills, lawsuit judgments and personal or business loans. This means that if a home is worth $350,000 more than what a homeowner owes on it, courts will not grant creditors' requests to order that the home be sold so that they can be paid.
Equity above $350,000, however, is a different story. In that case, a judge can order sale of all or a portion of the property so that creditors may receive what they are owed.
Gov. Jim Gibbons wants to make major changes in the homestead law, starting with raising the amount of protected equity to $550,000. We agree with this change. Many homes were purchased years ago and because of rising land values, especially in Clark County, now have equity well above $350,000.
But Gibbons isn't stopping there. He wants to establish annual fees that wealthy homeowners could pay to protect all of their equity, not only in their primary home but also in other homes they own. This would not be right. Equity much above the median price of a home should not have state protection. Someone with a multimillion-dollar home, and a vacation home or two to boot, should not be able to find refuge from their debt in state law.
Also, unscrupulous people, under this change, could use Nevada's homestead law to buy pricey homes as a way of protecting their money against debts that morally and ethically should be collected. The Legislature should not allow Gibbons to get away with turning Nevada into a haven for debt dodgers.
The homestead law was written to keep roofs over the heads of people who fall into debt through illness or accidents. That's the way it should remain.
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